Whether, like me, you thought the CRomnibus budget bill was a mess that should have been opposed or, like the White House, the best bad deal they could get, we can surely agree that this is no way to run the federal government. How could it be that my 12-year-old kid was far more conscientious on her eighth-grade science project (does soil near gas stations have higher pH levels than average?*) than the Congress of the largest economy in the world? I mean, she’s a great kid, but . . . really?
So, with that process failure in mind, and speaking of gas stations, allow me to strongly suggest that we prepare in advance for a forthcoming deadline: the current extension to the Highway Trust Fund, itself borne of previous last-minute patches, expires in May of 2015.
The Highway Trust Fund is supposed to be funded by the federal gas tax, but that hasn’t worked out so well in recent years for various reasons. First, our fleet is getting better mileage. Second, the trend in miles driven is undergoing its slowest growth in the history of the data (dating to the 1970s). If you’re one of those people who’s driving less and doing so in a higher mpg vehicle, give yourself a pat on the back. Those are both good things for the environment.
The third and primary reason for the funding shortfall, however, is that the federal gas tax of 18.4 cents per gallon hasn’t been raised or even adjusted for inflation since 1993. Simply adjusting the tax for inflation would put it at nearly 30 cents today.
The price for a gallon of gas is the lowest it has been since 2010. Having fallen more than a dollar since the summer, the price decline, if it sticks, could save the average household about $1,100. Of course, gas prices can be volatile, but according to the Energy Information Agency, they’re expected to stay around where they are through 2015.
Given the need to shore up the Highway Trust Fund and the recent price decline at the pump, shouldn’t an increase in the gas tax be on the table?
In fact, a few reasonable members of Congress from both sides of the aisle have suggested phasing in an increase of about 15 cents per gallon over a number of years, which, according to the Congressional Budget Office, would largely account for the impact of inflation since 1993 and provide the trust fund with the infusion it needs to meet its obligations.
Let’s say we phased in such an increase over three years, as per one bipartisan proposal (and that’s not the only one). That’s an increase of a little less than half a cent per gallon per month, which would be lost in the noise of weekly price movements. Fully phased in, it’s an extra $3 for a 20-gallon tank.
Now that’s not nothing, but when you consider that we drivers haven’t faced any increase in decades while the costs of upkeep for our transportation infrastructure have gone up, it’s hard to imagine a cogent argument against such a moderate increase. Given the growth in nominal earnings (wages have been flat in real terms, but rising at about the rate of inflation, around 2 percent), it’s an understatement to assert that most drivers would be hard-pressed to notice a three-year phase-in of a 15-cent increase per gallon in the federal gas tax. And I haven’t even mentioned the further benefits to the environment of the fuel efficiency we incentivize when we tax carbon like this.
Unfortunately, Congress typically opposes raising any taxes, even though such inflexibility is incompatible with modern economies facing the challenges we face — our demographics alone imply the need for more revenue. I’ll grant that there’s something abstract about that broad argument, but not in this case. The gas tax isn’t abstract at all. It’s a user fee for the wear and tear we mete out on our highways, roads, bridges and mass transit systems (14 percent of the trust fund supports mass transit) upon which we depend.
To be clear, we don’t have to replenish the fund. We can live with lousier and less transportation infrastructure. That would be bad economics, and I wouldn’t personally or professionally like it, but if that’s our national decision, then so be it.
But what we can’t do is have the transportation system I believe we want and need and not pay for it. That’s magical, childish thinking. In fact, strike “childish,” since we’ve already established that there are ongoing science fairs across the land where children are preparing in ways we grownups need to emulate.
One very good way to do that right now would be to raise the federal gas tax.
[*The study found no difference in pH levels in soil near or far from gas stations but the sample size was pretty small, as it was a really cold that morning.]